07/24/2014

Part 2 with Jeffrey Kaplan: IoT and Cloud Hot Buttons and Concerns

In part 2 of our discussion with Jeffrey Kaplan, Managing Director of the strategic consulting company THINKstrategies, we talk about some hot buttons and concerns regarding the Internet of Things (IoT) and the cloud. Don’t miss part 1 of our conversation, which covered the relationship between cloud computing and the IoT.

Wendy Toth: When you go out and talk to people about the IoT and the cloud, what are some of the hot buttons you hear, the things getting people the most excited about the intersection of these two trends?

Jeffrey Kaplan: First and foremost is the accelerated pace of the technology innovations, which are making sensors smaller and easier to deploy, and making the compute power that’s used to capture, collate and share the data more powerful and economical, as well. People are excited about the combination of technological advancements and economic improvements in that process.

Then there’s the consumer effect, which is that we are all becoming much more data driven. If you think back on the lineage here, part of that lineage is the Big Data piece. All the buzz of Big Data is correlated with the cloud, because it’s my belief that we wouldn’t have talked about big data if we didn’t know there was something we could finally do with all the new data around us.

TOTH: So you’re not blaming the cloud for there being so much data?

KAPLAN: There’s always been too much data. That’s nothing new. But the cloud gave us the opportunity to do something that we’ve never done before, which was to capture and correlate it and share it and makes sense out of it.

In a similar way, we wouldn’t be talking about the Internet of Things if we didn’t have the connectivity. There’s no sense in connecting anything to anything unless you’re collecting data and you plan to do something with that data.

TOTH: What are some ways that the data and the new connectivity are being used?

KAPLAN: There are three primary stages to the use of data and connectivity.

One is to react more quickly if something goes wrong someplace. For instance, if the brakes fail on a truck, if you have a sensor in that vehicle, you can become aware of the brake failure more quickly, so you can fix it more quickly and get the truck rolling again more quickly—which saves money for that trucking company’s business.

The second idea is that if we know the brake has been used a certain number of months or miles, we can alert the owner of that truck that it’s time to get new brake pads, before the brakes fail. So there’s a proactive aspect to the IoT.

Now, the third piece is taking that data and possibly creating a whole new service around it. Let’s imagine that in our same truck brake scenario, someone is tracking the brake pads on a whole bunch of trucks and recognizes that one owner is more proactive about replacing the brake pads than another owner. That data could be resold to the insurance industry, which can use the data to make decisions about who they should be insuring and for how much.

TOTH: Isn’t there something kind of unsettling about that concept?

KAPLAN: Well, whether we like it or not, that kind of scenario is coming. Now, to put it in more positive terms, I have a friend whose family business has manufactured meters for many years, originally mechanical meters like the kinds used on fire extinguishers. The fire extinguisher meter tells if the unit is full or not.

My friend turned the mechanical meter into a digital meter, put sensors on all the fire extinguishers, and is now reselling that data to various insurance companies. The insurance companies like to know, for example, which hotel chain is doing a better job of keeping their fire extinguishers properly prepared. All of a sudden, this guy who took over an old-school family business has changed it from a product business to a service business and not into an information business.

TOTH: I was going to ask you about some of the concerns people have about the IoT, but I think you’ve already started down that path!

KAPLAN: The down side of all these new capabilities is the whole issue of privacy and security.

But there’s another concern that is even scarier: Your car is becoming much more software-centric, and we’re all going to have connected cars with a lot of software that basically manages every aspect of the car. The good news is that when it works, it’s going to be pretty cool. The bad news—well, think about if you get a software update on your smartphone or your laptop. How many times does the update screw something up? Can you imagine what can happen if you’re getting a software update to your car and it screws up?

TOTH: OK, to end on a more upbeat note, how do you see your role in working with companies trying to navigate the new cloud and IoT worlds?

KAPLAN: In the past I played the role of an industry analyst, but now I’m more of a trusted advisor. Companies come to me for a more grounded real-world understanding about this whole transformation process and what it means to them strategically. They have to rethink who they are, how they position themselves, and how they bring their solutions to market. I help them figure out the right tactics to achieve their business objectives.

I also host executive forums such as the Connected Cloud Summit, which takes place this year on September 18 in Boston. Echelon is speaking at this conference and will address the connection between what’s happening in the rapidly evolving IoT world and how a lot of it is being fueled by the tremendous growth of the cloud. I refer to this event as the Cloud Innovators Summit because it focuses on how the cloud has disrupted the way organizations are thinking about their businesses and exciting, new ideas for achieving their corporate objectives. We’re expecting it to be a lively and interesting event.

IIoT Talks is a conversation between industry luminaries and Echelon Corporation about the opportunities of the Industrial Internet of Things (IIoT) market. Echelon's Chief Marketing Officer, Wendy Toth, will share highlights of these conversations via the company blog. If you are interested in participating, please send an email to cmartell@echelon.com.

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